Bitcoin Self-Custody at Scale Under European Regulation

Summary

The January 09, 2026 episode of the Robin Seyr Podcast features Julian Liniger explaining how Bitcoin adoption shifts as firms move from startup experimentation to regulated scale across Europe. He argues that MiCA-era compliance, bank competition, and infrastructure maturity now define the adoption landscape more than ideology or marketing. The discussion frames self-custody usability and recovery design as the decisive factors shaping Bitcoin’s path toward mass-market adoption.

Take-Home Messages

1. Self-Custody as a Product Challenge: Recovery and key management, not demand, remain the main barriers to mainstream Bitcoin use.
2. Regulation as Market Filter: European licensing regimes favor firms that can absorb compliance costs while maintaining clean user experiences.
3. Banks Will Lean Into Bitcoin: Custody and collateralized lending align with bank strengths and will expand rapidly under clear rules.
4. Risk Layers Matter: ETFs and treasury companies introduce governance and leverage risks distinct from direct Bitcoin ownership.
5. Adoption Can Rise Without Price Euphoria: Long-term holder selling and treasury shakeouts may coexist with steady infrastructure growth.

Overview

Julian Liniger frames Bitcoin’s next adoption phase as an operational and regulatory problem rather than a narrative one. He explains that Relai’s growth required a transition from rapid experimentation to disciplined engineering focused on uptime, scalability, and maintenance. This shift reflects the expectations of mainstream users who demand reliability comparable to traditional financial services.

Liniger links that operational maturity directly to Europe’s regulatory environment. He describes earlier low-friction onboarding as largely obsolete, replaced by higher compliance standards that increase costs but also clarify market access. In his view, MiCA functions as both a constraint and an enabler by creating predictable licensing pathways for firms prepared to meet them.

The episode contrasts custodial and self-custodial models through the lens of incentives and risk. Liniger argues that banks will naturally dominate custody and Bitcoin-backed lending because those services align with their balance sheets and distribution networks. He cautions, however, that institutional convenience expands intermediary risk and blurs distinctions between holding Bitcoin directly and holding claims on it.

He returns repeatedly to recovery and usability as the decisive adoption bottleneck. Liniger presents biometric-secured devices and “trustless backup” concepts as potential ways to reduce seed-phrase anxiety without surrendering control to custodians. The discussion closes by situating these product challenges within a maturing market marked by long-term holder selling, possible treasury-company failures, and expanding regulated access across Europe.

Stakeholder Perspectives

1. Bitcoin Service Providers: Focused on scaling compliance, reliability, and recovery design without recreating custodial dependencies.
2. Banks and Financial Institutions: Positioned to expand custody and lending services under clear European regulatory frameworks.
3. Regulators: Seeking standardized consumer protection, monitoring, and licensing while preserving innovation capacity.
4. Retail Users: Balancing convenience against sovereignty, with recovery confidence shaping custody choices.
5. Corporate Treasurers and SMEs: Evaluating Bitcoin allocations cautiously amid governance, volatility, and accounting concerns.

Implications and Future Outlook

The convergence of regulation and infrastructure maturity suggests Bitcoin adoption in Europe will proceed through formal financial channels rather than informal experimentation. As compliance becomes unavoidable, the competitive edge shifts to firms that can industrialize regulatory processes while preserving user autonomy. This dynamic reduces fragmentation but raises the stakes of design decisions around custody and recovery.

Bank participation will likely accelerate normalization while reshaping user expectations. Custody and collateralized lending may make Bitcoin accessible to wider audiences, yet they also concentrate risk in familiar institutional forms. Policymakers and users alike will need clearer frameworks to distinguish between sovereign ownership and layered financial exposure.

Market structure through the late-2020s may challenge simplistic adoption narratives. Periods of price stagnation driven by long-term holder distribution or treasury-company failures do not preclude meaningful progress in infrastructure and usage. The durability of Bitcoin adoption will depend less on short-term valuation and more on whether self-custody can become both safer and easier than intermediation.

Some Key Information Gaps

1. What security properties must a biometric-based recovery system satisfy to remain genuinely self-custodial? Clarifying these requirements is essential to prevent usability gains from masking new trust dependencies.
2. Under what conditions can Bitcoin-collateral lending scale without recreating systemic fragility? Answering this informs both bank risk management and supervisory design.
3. How should users and regulators compare the risks of treasury companies versus direct Bitcoin ownership? Clear frameworks would reduce misunderstanding and improve capital allocation.
4. Which recovery and interface designs most effectively reduce irreversible user errors? Evidence-based design standards could materially lower self-custody failure rates.
5. How persistent is long-term holder distribution, and how does it interact with regulated inflows? Better measurement would improve market interpretation and policy narratives.

Broader Implications for Bitcoin

Normalization of Bitcoin Through Regulation

As Bitcoin services integrate into formal regulatory regimes, adoption increasingly mirrors traditional financial diffusion rather than grassroots experimentation. This normalization may expand access while narrowing the space for informal, lightly regulated innovation. Over the next decade, Bitcoin’s societal role may be shaped as much by regulatory architecture as by protocol design.

Redefining Financial Sovereignty at the Consumer Level

The tension between custody and self-custody reflects a broader debate about individual financial autonomy in digital systems. If recovery design can reduce catastrophic user error, self-custody could become a practical expression of personal sovereignty rather than a niche ideal. Failure to solve this problem risks entrenching intermediary dominance even in decentralized monetary systems.

Institutional Layers on a Fixed-Supply Asset

The proliferation of ETFs, custodians, and treasury vehicles places multiple financial abstractions atop a scarce base asset. These layers may improve liquidity and access but also amplify governance and leverage risks disconnected from the underlying protocol (see my Bitcoin Worlds paper for more on this). Policymakers and investors will increasingly need to distinguish Bitcoin the asset from the structures built around it.

Adoption Without Price Euphoria

Bitcoin’s long-term integration into economic systems may proceed through periods of muted price action. Infrastructure build-out, regulatory clarity, and user-base expansion can advance independently of speculative cycles. Recognizing this decoupling is critical for assessing Bitcoin’s real economic impact over multi-year horizons.